Southwest and China show the Consequences of Poor Investment

Southwest China

Southwest reportedly uses 1990s technology to manage its crews, ground support, and aircraft.

Whereas other airlines used profits and COVID subsidies to invest in better infrastructure and workforce improvements, Southwest, which used to be known for its employee-friendly and customer-centric culture, shelled out dividends to investors.

When last week’s predictable winter storm hit, Southwest was alone among other airlines in its inability to adapt. Employee shortages impeded ground operations as people called in sick or refused demands to work overtime. Some of those who came to work suffered frostbite, which shows inexcusable leadership deficiencies. Poor communications infrastructure undermined Southwest’s ability to know where its crews and planes were and how to get them to the right places. The airline canceled flights a week later; thousands were stranded or separated from their bags.

China, meanwhile, lifted its draconian zero-COVID policy with little warning or preparation, exposing millions to death from the virus.  

China’s vaccines do not work as well as western ones, but chest-thumping nationalism was more critical to the Chinese Community Party than protecting their people. Zero-COVID also meant that few people built natural immunity from exposure; the virus could be as deadly in China as earlier and more lethal versions were in the west. Mr. Xi was asleep at the switch on the healthcare system, preferring to invest billions in threatening Taiwan and others instead of building hospitals and facilities needed for post-zero-COVID.

Southwest will take a massive hit to its bottom line and reputation. The Biden administration looks keen to sanction the company, too. I’ll be choosing United more often now because I don’t trust Southwest until they enact meaningful reforms.

The likely death toll in China will damage its international reputation and may inspire more public protests like the ones that brought about the end of zero-COVID. Mr. Xi used the pandemic to create the world’s most sophisticated police state, so brutal crackdowns are likely if protests threaten the regime’s stability. Mr. Xi and his cronies have only themselves to blame.

Southwest and China show that preventive action, like investing in your people and infrastructure, is always cheaper than corrective action.

What strategic investments are you making in yourself and your people?

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